There are many things I wish I’d been taught in school, but learning how to handle my finances is number one. If someone had assigned me to sit down with a representative of my bank, say, and talk about what an overdraft fee was instead of forcing me to take Geometry for the third time, then perhaps I might even feel a little guilty for all the classes I cut.
Perhaps this is something you’ve dealt with, too. Maybe you also dread opening letters from your bank. Or maybe you wonder why you set up notifications from all of your accounts when all they do is bring you anxiety as you clear them before looking.
If this sounds familiar, you’re not alone: According to a recent study, more than 55 percent of American adults feel “lost” when it comes to creating a financial future. This year, I became determined to no longer be part of that 55 percent! I made a resolution to declutter my financial life, figuring if that I could streamline all the paperwork and other complicated steps, I could finally get rid of my anxiety around money — and get better at saving and spending purposefully. Here’s how I did it.
Step 1: Switch to online billing
Every single time I receive a letter in the mail from a financial institution, it makes me anxious. And that anxiety leads to not looking at the contents of said letter and just promising to take care of it at some later point when I’m not so busy. And that “later point” often becomes “never” because my anxiety continues to mount! You too can say “no” to the mail! Everything’s online these days. Do you need your statements? Just download them or look at them in an app. And that brought me to…
Step 2: Check my accounts regularly and pay bills on time
When I broke up with paper billing, I promised myself that I would check my statements regularly. I wasn’t budgeting yet (we’ll get there in a second), but I was making an effort to know what exactly I was spending my money on. It sometimes made me uncomfortable to realize just how much I was spending on takeout, or that I wasn’t saving as much as I wanted to, but it was an important part of the process. It’s okay to be uncomfortable, especially when you use that discomfort as a prompt to make changes.
Step 3: Get some help to help make everything easier
It was a real “Oprah, change my life” moment except my new financial advisor’s name is James Holbach and he didn’t understand why I was doing so much screaming. You know what? I’m just a naturally loud person.
I was afraid that a financial advisor would be scary and glower at me and demand to know why I haven’t done better in my life. Holbach was none of those things. If anything, he wants his clients to know that their finances are nothing to be embarrassed about.
“No one in our society teaches anyone how to do this stuff. You just become an adult and you’re expected to kind of know it somehow,” he told me during our conversation. “The fact that you’re asking these questions means that you’re doing the right thing now and that’s what you should focus on.” Agreed!
Holbach helped me to figure out exactly what was important to me—what did I prioritize, financially, and why. Turns out I prize experiences over things, and that’s not exactly how I was living my life. But I’m ready and willing to embrace change!
Step 4: Create a budget
It was time to get down to business. I’d tried budgets before but had never been in the right frame of mind for them to stick. This time, I had Holbach’s support. He suggested that I create a savings goal. And then he suggested that I might want to be more specific than “live to be old and rich.” (Now it’s to retire on a cruise ship.)
Holbach had me look through my past bank statements, determine how much I’d been spending on GrubHub every night, and then compare that to how much I needed to save. I didn’t like it, but it had to be done. I used all the information I gleaned to create a realistic budget that will help me reach my goals.
Step 5: Get started and reap the rewards!
While it’s good to treat yourself sometimes, I realized that I have a really short memory when it comes to spending. I can spend $40 on dinner one day and totally forget about it the next! The same goes for spending on apps. Those dollars add up–and could be going into my savings account.
Holbach helped me see that even cheap products or subscriptions are a waste if I’m not really using them. That’s why a big part of my decluttering was breaking up with every premium network that I pay for, when I only watch one show on each of them. Some of them I wasn’t even watching at all! And I know I can sign back up when “Vida” comes back for a season two, provided my budget allows.
I’ve also canceled the credit cards I don’t use and am working on paying off the balances on the ones I do use in full each month. This way I’m not only saving for the future but also making sure that I’m not overspending. It’s important to do regardless of whether those plans include buying a house or retiring on a cruise ship. (I’ve done the math, and it’s doable!)
Decluttering wasn’t easy, but it was necessary, both for my bank account and my anxiety about the future. I’m still a little shaky about what IRAs are and my savings account is growing very slowly. But for the first time, I feel in control.